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Back to basics: Palm killing Foleo, focusing on strengths

foleo canceledIn the spectrum of consumer products there are smart phones and laptops and nothing in between.  Some think it should be that way. In late May, the creative minds at struggling hand-held maker Palm boldly declared otherwise. 

Believing there was a sizable market opportunity for a “tween” device, the company unveiled a prototype “Mobile Companion” device called Foleo.  Endowed with a 10 inch widescreen and a full keyboard, it was intended to be used in conjunction with a smartphone, like a feature-packed peripheral.  With pricing around $500, it would ship, they said, by mid September. That’s now changed.

Fast forward to now:  analysts stopped scratching their heads and asking “why,” private equity firm Elevation Partnersinvested $325m and made some leadership changes to turn Palm around, Palm is still struggling financially and now, finally, Foleo is dead.

In a blog announcement yesterday, Palm CEO Ed Colligan courageously declared they were killing the product line just days before shipping.  Now, unless Foleo is revisited in the future (which wasn’t ruled out), the only folio’s around their campus will be the those carrying accounting documents to tabulate the one time charges (which will be less than $10m according to Colligan.)

The decision to kill the product arguably should have been made months ago.  Still, it’s better late than never.   Palm’s roots, and strengths, have always been in their user experience (especially their User Interface).  Facing heavy challenges from other manufacturers like Research in Motion (Blackberries), Motorola, and even the iPhone (though the iPhone arguably targets a different graphic), this was not a good time to go off exploring new product classes.

Foleo was a science project – one of those seemingly wildly out-of-left-field experiments targeting an unproven market.  It might have been well suited for focus groups, or even capably explored by a fiscally sound company, it might well have a market impact, but for a company under fire it was an unnecessary distraction; a harmful tangent of capital and talent.

Cutting out the distraction, getting back to the basics, is sound, simple business logic for a turn-around. Finally, in this move, which seems to have the fingerprints of new leadership all over it, Palm is doing just that.

 The “right path,” Colligan says in his blog post, “is to offer a single, consistent user experience around [the next generation software platform] and a single focus for our development efforts.” 

That’s the best news out of Palm in a long time.   Maybe Elevation Partners will be able to save Palm after all.

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